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On Exceptionalism and Deviance


Journal of Foreign Relations 

The Wall Street Journal recently carried a speculative article by Ian Tally suggesting a link between the International Monetary Fund’s bailout loans to the European Union’s worst hit economies and sanctions against Iran. In essence, the article said that the Obama administration would likely support bailout loans to Greece, Italy and Spain in exchange for the EU agreeing to an embargo on Iran’s oil.

The source of the WSJ article was Jacob Kirkegaard of the Peterson Institute for International Economics in Washington. Kirkegaard speculated that the timing of the European Union’s “newly-proposed ban on Iranian oil imports” was too fortuitous to be purely coincidental. Greece, Spain and Italy are all heavily dependent on Iranian oil and therefore most resistant to an embargo. According to the WSJ, they are no longer resisting a ban. Italy says that it would support the measure “in principle” while Greece and Spain have indicated that they would not veto the idea.

What has changed? First of all, both Italy and Greece have new prime ministers, installed as part of an understanding with external rescuers, notably Germany and the IMF. The new prime ministers are not politicians, but technocrats, who took office within a week of each other in November 2011. Mario Monti of Italy, a former EU commissioner, became the prime minister, as well as the minister for economy and finance, replacing the colorful and highly controversial Silvio Berlusconi. The new prime minister of Greece, Lucas Papademos, was formerly the vice president of the European Central Bank.

These events were the most obvious evidence of an extraordinary shift in power from elected politicians to supranational institutions. There was also a change of government in Spain last November, when the center-right Popular Party came to power, defeating the governing Socialist Party. These changes were a political earthquake in the midst of an economic crisis. It struck in defiance of the popular mood on the streets.

The disconnect between the rulers, including and backed by wealthy corporate interests, and the subjects has consequences for domestic as well as foreign policies of the countries concerned. The mood in the main street everywhere is anti-war. But such sentiment cannot control governments’ propensity to fight foreign wars while corporations are given freedom to operate in an environment with minimal regulation. While the state withdraws from policy making and essential service provision, private corporations are allowed practices which determine employment, wages, and consequently money circulation. The accumulation of wealth by one percent greatly reduces the purchasing power of the 99 percent. High unemployment and depressed economy result in lower interest rates. If banks are threatened with failure, the tax payer is there as the rescuer of last resort.

What does it have to do with sanctions and the current talk of military action against Iran in Western capitals? The economic crisis has made all but the wealthiest countries susceptible to supranational powers. It enables the IMF, and the United States, to exercise control over countries in need, in both domestic and foreign policies.

The Wall Street Journal referred to one issue, that of an embargo on Iranian oil sales. There are other examples where pressure tactics have been used against foreign governments to tow the American line. The increasingly aggressive U.S. campaign against Iran ranges from the European Union to countries in Asia, including India, China, Japan and South Korea to name a few.

The veto powers of China and Russia rule out further sanctions on Iran with the UN Security Council’s approval. So the Obama administration and Congress have adopted the tactic of forcing other countries to obey American law and go along with sanctions imposed by Washington. The temptation to look and act tough from Obama to Republican presidential aspirants, Congressmen and Senators is irresistible as the November 2012 elections approach. American policy of making the world obey U.S. domestic law is blatant and bizarre.

It makes a mockery of other nation-states’ independence and sovereignty and their right to formulate and pursue their own policies. The United Nations is rendered irrelevant while the United States goes Rambo on the international stage. That such behavior is causing widespread alienation among other countries, and ultimately threatens America’s own interests, is a message lost in Washington.

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